I have received great tips from readers of Part 1 of this post pointing me to resources for both nonprofit and for-profit start-up social entrepreneurs. Below is my list of investors, incubators, networks and other resources that support start-up social ventures in the United States (some also fund non-U.S. organizations). I have tried to be as comprehensive as possible, but if I have failed to mention any investor or resource, please feel free to give it a shout-out in the comments section below. Please note that start-up is broadly defined as an organization that has been operating for less than three years and that is looking for a first-time or primary funder.
Investors in both for-profit and nonprofit start-ups
Echoing Green – 12-15 fellowships to start-up for-profit or nonprofit social entrepreneurs with funding of $30,000 for an individual or $90,000 for a two-person partnership over two years. To date, Echoing Green has invested over $28 million in seed grants to over 471 social entrepreneurs. The 2009 application is now open. Apply by December 2, 2009. http://twitter.com/echoinggreen
Unreasonable Institute – Cool new early-stage funder and incubator. The Unreasonable Institute has a $150,000 fund in which 25 selected entrepreneurs choose to allocate amongst each other. The Institute also holds an Investors’ Conference at the end of a 10 week-summer institute, giving entrepreneurs the chance to pitch their ideas to potential funders for serious capital. Applications for the first group of 25 social entrepreneurs will open November 15, 2009. To qualify your venture must have a plan to be financially self-sustaining within one year, to scale beyond country of origin within three years, and ultimately to meet the needs of at least one million people. http://twitter.com/beunreasonable
Sparkseed – Incubates start-ups led by freshman and sophomores in college. Seed capital is capped at $1,000 and web tools worth $10,000, but it appears that the value of the program is for aspiring social entrepreneurs to develop entrepreneurial skills, network, and benefit from mentorship. Applications for 2009 are already closed. http://twitter.com/sparkseed
Investors in for-profit start-ups only
Investors’ Circle – Investor’s Circle’s Fall Conference takes place next week from November 15-17 in Washington DC. Investor’s Circle invites 20-25 companies to present at their Fall and Spring venture fairs, where their 225 angel investors, professional venture capitalists, foundations, family offices and others gather to make investments on companies from early or expansion-stage for-profit social ventures. This Fall Conference, they invited 22 companies of the 250 that applied to present. The application fee is $150, and if you’re invited to present, you have to pay $995 to “cover some of the cost of producing the event” that they help you prepare for. Companies that do not expect to generate revenues of at least $5 million within the next five years will not be accepted. Investor’s Circle also encourages minority and women-led companies. http://twitter.com/investorscircle
Venture Well – Developed by the National Collegiate Inventors & Innovators Alliance (NCIIA), Venture Well promotes collegiate entrepreneurship by investing in a select number of for-profit student ventures (nine this year) that address “health, wellness and the environment,” are broadly scalable, and address a big opportunity for Bottom of the Pyramid (BoP) customers, Top of the Pyramid (ToP) or both. Investment is expected to range from $50,000 – $100,000 and comes in the form of convertible debt. 2010 application information and deadlines will be posted soon. http://twitter.com/venturewell
Good Capital and The Hub, Code named “HUB Cap” – This spanking new initiative, not yet launched, is an example of good things that happen when organizations collaborate. Details will be announced early next year, but what I can tell you is that there will be a few new avenues for for-profit social entrepreneurs to access start-up capital in the range of $25,000-$100,000 for a total of up to $1-1.5 million. In addition to funding, HUB Cap will provide peer support, mentorship and professional services. It’s super exciting, so stay tuned.
Investors in nonprofit start-ups only
Draper Richards Foundation – Six fellowships are granted to start-up nonprofit social entrepreneurs with funding of $100,000 annually for three years. Apply anytime – Draper Richards receives and reviews applications throughout the year and award grants throughout the year.
Blue Ridge Foundation – Blue Ridge couples seed money with in-kind support and networking opportunities. Portfolio organizations receive five years of funding and office space for up to three years. Blue Ridge does not fund organizations that are more than two years old.
New York Foundation – NYF funds nonprofits that address a critical need of a disadvantaged population. The applications that stand the best chance of receiving funding emphasize advocacy and community organizing and involve New York City or a particular neighborhood of the city. For start-up organizations, NYF may provide funding for a total of five consecutive years. Grants range from $40,000 to $50,000. In addition to grant money, NYF provides extensive technical assistance in the form of workshops, training, and consultants. The next application cycle is March 1, 2010, but due to the economy NYF will be making fewer new grants this year.
ZeroDivide – ZeroDivide funds, supports and incubates nonprofit social entrepreneurs that leverage technology to benefit low-income, minority and other underserved communities. They receive and review applications on a rolling basis and award grants of no more than $75,000 throughout the year. The first step is to submit a Letter of Inquiry.
The Manhattan Institute – Funds up to five individuals who have originated and effectively implemented a new nonprofit organization providing direct services to those in need (mature nonprofits also quality for the award as long as they have a new idea or approach to a social problem). Nominations for the $25,000 awards are solicited from donors who have demonstrated a belief in the organizations they nominate. Nominations for the 2010 awards will be accepted from January 25 – March 19, 2010.
RSF Social Finance Seed Fund – The RSF Seed Fund provides small gifts (between $1,000 and $5,000) to seed new initiatives that fall within their mission statement and one of their focus areas – social finance, food & agriculture, education & the arts, and ecological stewardship. Grantees should demonstrate capacity for growth, and plans to reach financial independence. The deadline to submit a grant proposal to the RSF Seed Fund for the annual grant cycle is March 15, 2010.
The Social Venture Capital Foundation (SVCF) – SVCF funds nonprofit social entrepreneurs based on the belief that they are “planting Seeds of Change.” While they hope to provide seed money grants in the range of $5,000-50,000, they are currently only able to fund in the $2,000-$5,000 range.
Chinook Fund – Grants of up to $4,000 are awarded to start-up nonprofits four years old or younger for up to two consecutive years.
Kauffman Foundation – In general, Kauffman Foundation grants are limited to nonprofit organizations that have significant potential to demonstrate innovative service delivery, in support of education and entrepreneurship. On their website, there is no mention of a cap on the size of the grant.
Business plan competitions
Global Social Venture Competition – The GSVC funds both nonprofit and for-profit student start-up social ventures. Organized by the Haas School of Business at UC Berkeley in cooperation with five Regional Partners and four Outreach Partners, teams around the world compete for the top prize of $25,000 while gaining valuable professional feedback on their ventures. To qualify, each team must include a graduate business student from any business school in the world or an individual who has graduated from a graduate business program within the past two years (from the date that the plan is first submitted). The graduate business student must be actively involved in the venture. Deadline to submit your executive summary is January 10, 2010.
SocialReturns– Previously the Yale School of Management- The Goldman Sachs Foundation Partnership on Nonprofit Ventures National Business Plan Competition, which ceased operations in September 2005, SocialReturns (a much better name!) is launching a new series of Social Enterprise Business Plan Competitions in the next several months. Stay tuned for an announcement about the award categories, the criteria for entrance, and the start date for the first competition by registering online.
Scaling Social Impact Competition – The “early-stage growth” competition is for U.S. nonprofits with a focus in education, youth development, health, poverty alleviation or community economic development and that have an “intent to scale.” The winner will receive up to $50,000 in cash and the services of a consulting firm to further develop its growth plan. The annual competition includes three rounds of evaluation. To apply for Round 1, submit your application by December 18, 2009.
Global Social Entrepreneurship Competition – Students from around the world, and across fields of study, are invited to apply with their innovative, commercially sustainable business solutions to problems of poverty in developing economies. Applicants go through three rounds to compete for a total of $17,000 in prize money. Applications for this year closed earlier this month.
I hope to write a Part 3 to this blog series to dig deeper into the choice of being for-profit versus nonprofit and to share stories of how successful for-profit social ventures “made it”. Please help me but letting me know about your favorite for-profit social ventures and how they raised start-up capital.